Understanding the Loan Contingency

When you’re buying a home, the loan contingency is the final of the three main contingencies in a standard real estate contract—following the inspection and appraisal contingencies. It’s a critical step that ensures your financing is fully approved before moving forward with the purchase.

What Is a Loan Contingency?

A loan contingency protects the buyer by allowing time to secure final loan approval from the lender. This means your lender has reviewed all necessary documents—like your income verification, credit, and the appraisal—and is ready to fund the loan.

If your financing falls through during this period, the contingency gives you a way to back out of the contract without losing your deposit.

When Does It Happen?

Typically, the loan contingency period happens around day 17 of your escrow timeline. By this point, your lender should be close to final approval. Once everything looks good, your loan officer will give you the green light to remove your contingencies.

However, it’s important to note that you should not remove contingencies prematurely. Wait until the listing agent specifically requests the Contingency Removal (CR) form. Once it’s requested, Adriana will send it over to finalize this step and allow the purchase to move forward.

Why It Matters

Removing contingencies, including the loan contingency, signifies your full commitment to purchasing the home. From this point forward, if you decide not to move forward for a reason outside of the contract, your earnest money deposit may be at risk.

That’s why communication between your agent, lender, and the listing agent is key. The Avila Real Estate Group team will make sure you’re informed and confident before taking this important step. Connect with 

Still Have Questions?

Our team is happy to help! Buying a home can feel complicated, but you don’t have to navigate it alone.
If you’re unsure about when to remove contingencies—or want help understanding your next steps—The Avila Real Estate Group is here to guide you every step of the way. Click here to connect with us today!